FTSE Finish Line : FTSE Gains Ground as Mining and Banks Offset CPI Spike
FTSE Finish Line : FTSE Gains Ground as Mining and Banks Offset CPI Spike
London’s FTSE 100 index gained notable ground in positive territory on Wednesday, supported by strong buying across mining and financial counters as easing crude oil prices and softer global bond yields lifted market sentiment. Investors largely absorbed an expected uptick in UK inflation, remaining cautiously optimistic ahead of key monetary policy updates from the U.S. Federal Reserve later in the day and the Bank of England on Thursday.
Resource and financial blue chips provided crucial support as Middle East supply anxieties eased following reports of additional Saudi crude shipments via Oman. Rate-sensitive heavyweight banks added 1.6%, with Standard Chartered gaining 2.2% and HSBC rising 1.3%. Meanwhile, homebuilders outperformed the wider market with a 4.4% sector rally, led by Barratt Redrow, which surged 8.8% after delivering stronger reservation rates, a robust order book, and beat-and-raise profit figures. On the downside, Unilever shed 1.4% following news that UK competition regulators launched a probe into its proposed merger with McCormick. Mid-cap card retailer Moonpig fell 5.8% amid consumer spending concerns, while Entain dropped after announcing plans to cut roughly 400 customer service roles to mitigate the impact of higher U.K. gambling taxes ahead of its upcoming FTSE 100 index exit.
On the economic front, U.K. headline CPI inflation accelerated to a five-month high of 3.1% year-on-year in August, up from 2.9% in July and matching consensus expectations. The continued pass-through of higher energy and transport costs primarily drove the increase. Crucially, price growth excluding volatile energy remained stable, with core and services inflation exceeding the Bank of England's projections by just 0.1 percentage point each. The composition suggests the inflation overshoot remains largely an external energy story rather than a broader domestic problem.
Looking ahead, global central bank catalysts remain a key focus. Money markets are pricing in a 92% probability of a 25-basis-point rate hike from the Federal Reserve on Wednesday evening. Attention will then shift to the Bank of England on Thursday, where policymakers are widely expected to hold interest rates steady while markets continue to price in at least 43.9 basis points of cumulative rate increases by year-end.
Finish Line: U.K. equities pushed into positive territory as strong momentum in homebuilders, banks, and miners helped look through a temporary energy-driven bump in headline inflation. With crude oil pulling back and broader underlying inflation holding steady, the FTSE 100 relies on valuation support and resources strength as central bank decisions unfold.
TECHNICAL & TRADE VIEW – FTSE100
Daily VWAP Bearish
Weekly VWAP Bearish
Above 10700 Target 11150
Below 10400 Target 9500
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Patrick has been involved in the financial markets for well over a decade as a self-educated professional trader and money manager. Flitting between the roles of market commentator, analyst and mentor, Patrick has improved the technical skills and psychological stance of literally hundreds of traders – coaching them to become savvy market operators!